According to Deloitte Access Economics, Australia’s ongoing housing crisis is projected to intensify before any improvement is seen, putting pressure on the federal government to address these issues in the upcoming May budget.
“The cost of land, materials, and labour will stay at higher levels, while recent insolvency rates suggest builders will need bigger profit margins if they are to deliver the significant lift in dwellings that governments and the community are crying out for,” said Stephen Smith, partner at Deloitte Access Economics, in the firm’s latest business outlook report.
Smith expressed concern that achieving the national goal of constructing 1.2 million new homes from mid-2024 may not be feasible due to the current construction pace, hindered by sluggish new dwelling starts and a backlog of unfinished homes plaguing builders, according to an NCA Newswire report.
“The correcting [of] the housing crisis will take years and will get quite a lot worse before it gets better,” Smith said.
With the May 14 budget on the horizon, various industry groups and advocacy organisations have intensified their calls for governmental action. These groups include the Master Builders Association, the Property Council, and the Community Housing Industry Association.
In a joint initiative, these groups are urging the government to double the size of the Housing Australia Future Fund to $20 billion, aiming to meet ambitious home-building targets.
Additionally, Anglicare Australia has highlighted a severe lack of rental affordability in its latest snapshot, describing the situation as “the worst it had ever been.” The report showed only 13.4% of rental listings are affordable for a typical family on minimum wage.
Anglicare and other social welfare groups are advocating for increased social security payments and a comprehensive reform of tax breaks for property investors.
In response to these growing concerns, Housing Minister Julie Collins outlined the government’s ambitious plans: "More help for home buyers, more help for renters, and more help for Australians needing a safe place for the night.”
The government’s strategy includes the ongoing operation of the Housing Australia Future Fund, development of a national housing and homelessness plan, and legislative efforts towards a help-to-buy shared equity scheme.
Key independent senators, including David Pocock and Jacqui Lambie, are championing reforms to investor tax breaks, suggesting that even modest changes could free up significant federal funds.
According to modelling by the Parliamentary Budget Office, these reforms could save $16 billion over a decade, potentially redirecting those funds towards building more social and affordable homes, NCA NewsWire reported.
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